Entrepreneur FAQ

• What is the UK Angel Investment Network?  The Angel Investment Network is an online platform designed to connect entrepreneurs (looking for growth or start-up capital) and angel investors (looking for investment opportunities). The Angel Investment Network is unique in that it offers a local, national and global platform with partner networks across North America, South America, Europe, Africa, Asia and Australasia. The Angel Investment Network is continually growing, developing and updating it's extensive database of angel investors.
• How do I know if my proposal has been received? You will know that your proposal has been received if it appears in the "active proposals" area of your member's area. If no proposal appears in your member's area then you will need to re-do your proposal. Always write your proposal in another programme and cut and paste to avoid the page timing out.
• What is an Angel Investor? Originally, the term "angel" was coined to refer to the people who financed Broadway plays when all else failed. Today this term has become common among the investment community to refer to a high net-worth individual that invests their own personal funds in various businesses. In the UK, it is estimated that there are well over 200,000 potential angel investors that annually invest approximately 3 billion in UK businesses and currently own over 12 billion in existing equity. This represents roughly 7% of what the banks are investing. As well, statistics show that this figure trumps that of venture capital lending. The UK labour market and productivity centre estimates that angel investments have financed approximately twice as many firms as any other form of external equity investment, including institutional venture capital.
• Who is a typical Angel Investor? Angel investors are usually wealthy, well-educated, self confident, ambitious and mostly male aged 45-55. They have probably sold a business or taken early retirement as a senior executive, exits sought after five years, utilising the income and capital gains tax relief available under the Enterprise Investment Scheme (EIS), seeking high capital growth, i.e. 35% / 40% per annum compound, usually seeking some active management involvement, often quirky / motivated by a wide range of desires and preferences, investment decisions may be driven by moral /social dimensions/personal experience, seeking enjoyment and personal satisfaction, completes his/her own due diligence, values business on a combination of earnings based-method / "gut feel", invests within one/two months of identifying opportunity and may have up to four investments running at one time. Angels are also extremely discerning in the projects that they will invest in (rejecting, on average, approximately 97% of the proposals submitted to them). Angel investors typically invest in a business after the entrepreneur's "love capital" (capital from relatives and friends) has been exhausted, but before the firm has reached a stage at which it will be eligible for venture capital investment. Angel investments typically range from about £15,000 to £300,000, although investments may range upwards of £500,000. Research also indicates that, historically, most angel investors seek to invest close to home-within a 100 mile radius of where they live.
• What is the difference between an Angel Investor and a Venture Capital firm? Generally, angel investors do not invest in deals over £1 million, whereas venture capital firms typically do not look at deals under this amount. Angels make their own decisions as opposed to a board or group of people making a decision for investors that have pooled money together. Angels tend to be more involved in the businesses that they invest in and provide assistance in ways that venture capital firms do not. Angels typically do not own as large a stake in the company as a venture capital firm would. Another benefit of being an angel investor is the reception of certain tax incentives from investing in UK controlled small businesses.
• Why isn’t it free of charge?  Many people have asked us why we charge entrepreneurs for the service. Firstly we are running a commercial enterprise and we need to cover our admin and promotion costs, pay staff to check your submission and pay for the upkeep of the website. We don’t get any public funding for AIN. Secondly we are providing a valuable service to the entrepreneurs who need the much needed to support to get their ideas in front of investors. To set up a serious business with outside funding you do need to be prepared to spend some money. The fee is very very low compared to other in the industry who will often charge around 5% of the amount you wish to borrow.
• Who are the Angel Investors on this website? The angel investors on our website have been compiled from databases of company officers, various professional advisor sources, new angel investors registering through the site, as well as private investment groups that are looking for alternative investments. The site is continually updated with new angel investors looking to invest in companies like yours.
• Why don’t you take success fees instead?  If you think of Angel Investment Network as the funding equivalent of an online dating agency it makes more sense. You wouldn’t expect a dating agency to only get paid if and when you marry the partner you found on their site. They wouldn’t be able to find you or know you were getting married without employing a private detective! Likewise we can’t hope to individually track everyone who enters their idea over the internet. Often all we have is an email address for you. Plus we have no control over how good your idea is and therefore your likelihood of finding an Angel. There may be a few Angel groups who don’t charge upfront, but they heavily screen incoming ideas and reject about 90% of them, which means most people are left without a chance of connecting with Angels.
• How is my privacy protected? The site was developed using proprietary database management tools and a secure server is used to assure that no one sees your business or personal information. Your information is not offered to any third party for any purposes. The information you enter into the website is kept confidential and private within the website. Although you should never give away more information than you feel comfortable with. Further information can be given to investors at a later stage
• Why should I use this service? As an entrepreneur, you are already aware of the growing resistance of banks in the UK to finance small business. It is virtually impossible to obtain financing without having secured assets, providing personal guarantees, etc, etc. Angel investors are the logical source to provide financing to small business. With ? 1 billion invested annually in the UK and growing all the time, the main obstacle is locating and presenting your idea to this large group of investors. The Angel Investment Network allows an entrepreneur to:

  a) Find a source of capital.

  b) Find an experienced investor that can provide guidance and support.

  c) Make it all come together in a fast and efficient way.

• Due Diligence Please be aware that after the initial match has been made it is the entrepreneurs responsibility to carry out diligence on the investor. Please inform us of any suspicious behaviour.
• How will I attract the attention of potential investors? When dealing with an angel investor, at the very least your proposal should address the following;
  - How much money do you need?
  - Why do you need it?
  - When do you need it?
  - What are you willing to give up to get it?
  - When and how can you pay it back?
  Investors need your answers to these questions before they will even consider helping you. They are not looking for "pipe dreams" or unprofessional sounding proposals. They expect a reasonably sound business plan as well as an understanding from entrepreneurs that an investor is not going to just blindly hand over significant sums of money with no strings attached whatsoever. They may be angels but there are limits to what they are prepared to do.
• How can I pay if I don't want to use a credit or debit card? If you are unable to or uncomfortable with using a credit card, you can pay via cheque or make a deposit when beginning the process of establishing contact with a potential investor if you prefer. All that you would need to do is email us to inform us of your intention using the "contact us" page on this website. At that point, we would inform you of what steps need to be taken to complete the transaction with as little hassle as possible.
• I have other questions. Who do I contact? Contact us by email: admin@angelinvestmentnetwork.co.uk